Takeover talks push JBA shares skyward

Acquisition Reseller vulnerable to change of ownership as SCH prepares to buy stake.

Shares in JBA Holdings rocketed last week after the softwareH prepares to buy stake. manufacturer and IBM reseller admitted that it was in acquisition talks.

There was growing speculation that Specialist Computer Holdings (SCH) was preparing to mount a bid for JBA as it emerged that the hybrid reseller had increased its total stake in JBA to 11.27 per cent.

The move by SCH comes just one week after it acquired Lantec, the systems integration and services arm of Elcom for an undisclosed sum, establishing it as the UK's second largest reseller after Computacenter with a projected turnover of £700 million.

JBA issued a statement to the Stock Exchange on 14 July stating: "The Board of JBA Holdings Plc notes the recent rise in its share price and confirms that the company has received an indication of interest which may or may not lead to an offer being made for the company. A further announcement will be made when appropriate".

The following day, SCH acquired a further 0.4 per cent in JBA, bringing its total stake to 6.01 per cent. In addition, Specialist Computer Holdings Retirement Benefit Scheme increased its holding in JBA by 0.14 per cent to 2.91 per cent, and Peter Rigby, chairman of SCH, upped his stake by 0.14 per cent to 2.35 per cent.

Shares in JBA Holdings jumped 47p to 191p - a 32 per cent rise - following the announcement, before closing at 181p on 19 July.

An industry source said: "JBA would be a perfect fit for its reseller arm Specialist Computer Centre, and Peter Rigby is looking to have a £1bn company by the end of the year - the level at which Computacenter floated. However, as a rule SCH doesn't pay a premium for its acquisitions so it depends a lot on the price for JBA."

A representative for JBA said the company had nothing further to add the statement made last week.

SCH claimed it was against company policy to comment on rumours and speculation.